Contract trap · Vendor and freelance
Evergreen B2B auto-renewal
The agency/vendor contract renews automatically for successive 12-month terms unless cancelled in writing 60-90 days before term end (sometimes by certified mail only) after a 'non-cancellable' initial term at 'then-current pricing'; the monthly retainer is non-refundable and payable regardless of work done, unused hours expire monthly, a minimum spend applies, time is billed in 15-30-minute increments rounded up and setup fees are non-refundable.
- Severity
- Serious
- How often it turns up
- Common
- Holds up?
- Usually enforceable
- Clause phrases
- 24
What it looks like in a contract
Redline matches these phrases against your document verbatim. Drafters rarely invent new wording — they copy it, which is why the same sentences turn up across unrelated contracts.
In English-language contracts
- shall automatically renew
- for successive one-year terms
- at least ninety (90) days prior to the end of the then-current term
- evergreen
- minimum term of 12 months
- non-cancellable
- renewal at then-current pricing
- retainer is non-refundable
- unused hours do not roll over
- minimum monthly commitment
- take-or-pay
- billed in 15-minute increments rounded up
In Russian-language contracts
- договор считается пролонгированным
- автоматически продлевается на тот же срок
- если ни одна из Сторон не заявит о расторжении не менее чем за 60 дней
- минимальный срок оказания услуг 12 месяцев
- уведомление направляется заказным письмом
- абонентская плата взимается независимо от объема
- досрочное расторжение не допускается
- абонентская плата не возвращается
- неиспользованные часы сгорают
- аванс является невозвратным
- минимальный рекламный бюджет
- округление до 30 минут
Check your own contract
Paste a clause, a page or the whole document. Nothing leaves your browser: the matching runs here, on this page, against the phrases above.
Why it bites
Business customers are outside almost every consumer auto-renewal law — miss the window by a day and you owe another full year; clients pay for hours never delivered and cannot claw back an advance when the agency stops performing; rounding turns a 3-minute email into 30 billed minutes; this is the classic agency lock-in stack (marketing, SEO, IT support, equipment service, SaaS).
Is it enforceable where you are
The same clause can be routine in one country and void in another. What follows is what the law says where you are — not advice on your particular contract.
B2B terms get much less protection: in the UK, UCTA 1977 s.3 tests standard terms for reasonableness; in the EU, the Late Payment Directive 2011/7 caps payment terms and P2B Regulation 2019/1150 applies to platforms.
United States
Consumer ARLs mostly exclude business customers, but NY GOL §5-903 (service/maintenance contracts: provider must send notice 15-30 days before the cancellation deadline or renewal is unenforceable) and Wisconsin §134.49 apply; the FTC 2024 click-to-cancel rule was vacated in 2025 and was consumer-only; a 'non-refundable' fee unrelated to loss may be attacked as a penalty but rarely successfully in B2B.
- Cited
- FTC
- GOL §5
European Union
Directive 93/13 Annex (h) protects consumers only; Belgium's B2B unfair-terms law grey-lists tacit renewal without reasonable notice and clauses letting the drafter keep payment without performance; Germany applies §307 BGB reasonableness B2B.
- Cited
- §307 BGB
- 93/13 Annex (h)
- Directive 93/13
United Kingdom
No B2B protection (CRA 2015 is consumer-only); evergreen clauses and proportionate retainer forfeitures enforced as written between businesses (Makdessi).
- Cited
- CRA 2015
- Makdessi
Russia
Пролонгация действительна; абонентский договор прямо разрешает платить независимо от востребованности услуг (ст. 429.4 ГК); но заказчик услуг вправе отказаться от договора в любое время, возместив фактические расходы (ст. 782 ГК), и неотработанный аванс за будущие периоды взыскивается как неосновательное обогащение (ст. 1102) — если только не согласована плата за отказ (Пленум ВАС № 16 п. 4).
- Cited
- ст. 1102
- ст. 429.4 ГК
- ст. 782 ГК
Where this has actually happened
Regulator actions, court rulings and the contracts they were fought over.
- New York General Obligations Law §5-903
- ACCC v Fujifilm Business Innovation (Federal Court of Australia, 2022) — automatic renewal and unilateral variation terms among 38 terms declared unfair to small businesses
- ГК РФ ст. 429.4 (абонентский договор)
What to do
In order, from the thing that takes a minute to the thing that takes a letter.
- Change to month-to-month after the initial term or renewal only by affirmative written agreement
- Cut notice to 30 days by email and require a renewal reminder 60 days out
- Add termination for convenience on 30 days' notice after the first term
- Roll over unused hours for at least 3 months, make the retainer refundable pro rata on termination for cause, require monthly time reports in 6-minute increments and treat setup fees as earned only on a defined onboarding deliverable
- Diary the notice deadline the day you sign. RU: if the vendor calls it an абонентский договор, negotiate the amount down — that structure is enforceable.
Traps that travel with it
Drafters who use one of these usually use several.